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DA bemoans SAA bailout

Article By: Setumo Stone

Mon, 07 Jan 2013 8:40 AM

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AFP

The Democratic Alliance (DA) said on Sunday it had no confidence in Dudu Myeni, the new acting chairwoman of South African Airways (SAA) who is seen to be a close ally of President Jacob Zuma, after revelations that the government was last month called in to bail out the national carrier, again.

Last week, reports emerged that SAA received a guarantee of R550-million from the state last month - for fuel costs and other short-term commitments - capping what had been a difficult year for the national carrier after it reported a R1.25-billion loss for the year ending in March last year.

DA spokesperson on public enterprises Natasha Michael said on Sunday that Ms Myeni’s appointment - following the resignation of former chairperson Cheryl Carolus and six board members in September - "did little to strengthen the position of the crisis-ridden airline".

Ms Michael said Ms Myeni’s record did not inspire confidence, citing among other matters a Special Investigating Unit probe into allegations of "maladministration, abuse of state resources, unfair dismissal of staff, and noncompliance with procurement and tender processes" between 2004 and 2008 when Ms Myeni was heading a water board under the Department of Water Affairs.

SAA said in a statement on Sunday that a key part of the board headed by Ms Myeni was to work with the executive management in formulating a credible turnaround strategy for the airline.

"This process, including a thorough review of all aspects of our operations, revenue drivers, expenditure and costs, is well under way."

Spokesperson Mayihlome Tshwete said on Sunday that Public Enterprises Minister Malusi Gigaba had contracted a service provider at around the last quarter of last year to conduct "scientific research" on SAA and the airline market, in a bid to properly understand why the national carrier kept coming back to the state for financial support.

Mr Tshwete said the month of December had always been tough for SAA.

The bail-out was "not above and beyond the financial guarantees that the government had already made available for SAA".

Ms Michael said privatisation of the national carrier was the only recourse, "and government can no longer hide behind the excuse of ‘national pride’ ... in an airline that survives on repeated government bail-outs".